Remedial Pension Service Statement - Release to members
Remedial Pension Service Statement - Release to members
The Remedial Pension Service Statements (RPSS) are now being issued to members. As a reminder this is in response to the McCloud judgement to put members pensionable earnings from 1 April 2015 to 31 March 2022 back into their legacy scheme, being the 1995/2008 NHS Pension Scheme.
Members who previously incurred a tax charge will require a digital report to be submitted to HM Revenue & Customs to correct the position. The NHS have introduced a Cost Claim Back Scheme to reimburse members for the professional fees incurred for correcting their tax position.
Summary of the background
The introduction of the 2015 NHS pension scheme forced members to move into the 2015 NHS Pension on 1 April 2015, unless by reason of age, they had protection. If a member was within 10 years of retirement age, they were either entitled to full protection or transitional protection. This meant some members did not join the 2015 NHS Pension Scheme and some members moved to the scheme within the transitional protection period, 1 April 2015 to 31 March 2022. This decision was challenged in the courts. The outcome of the case was that this decision gave rise to age discrimination for members. To rectify the impact on pension benefits for members that moved into the 2015 scheme, all members pension benefits earned during the 7-year period 1 April 2015 to 31 March 2022 was to be transferred back into their legacy scheme, being the 1995/2008 NHS Pension Scheme. This period is known as the “remedy period”.
Impact of remedy period
Members that are impacted by the remedy period will have their pension benefits recalculated. This will increase the pension benefits in the 1995/2008 Pension Scheme. The legacy scheme will now include earnings up to 31 March 2022 rather than 31 March 2015 (or the date you transferred to the 2015 scheme).
Impact for tax charges and reporting
As your pension benefits will change as a result of the McCloud remedy the growth in your pension benefits for tax purposes will also change.
NHS Pensions have started to release statements to members. The RPSS will detail your revised growth for tax purposes for the years affected. Where your tax position has changed, you are required to report the changes to HMRC via a digital disclosure. The digital reporting is based upon the tax returns previously submitted to HMRC, and the Scheme Pays Elections made.
If you have previously incurred tax charges it is possible a refund will be due - either to your pension scheme if you used the Scheme Pays facility, or to you personally if you paid the tax directly to HMRC.
NHS Cost Claim Back Scheme
The digital disclosure members need to submit to HMRC will require professional assistance: the information to report is complex so most members will need help to ensure their report is correct. The NHS recognise this additional reporting will incur professional fees for each disclosure made and have introduced an NHS Cost Claim Back Scheme which enables you to be reimbursed for the fees incurred up to £1,000 inclusive of VAT.
Please see the link below which explains the NHS Cost Claim Back Scheme for you to be reimbursed for professional fees https://www.nhsbsa.nhs.uk/public-service-pensions-remedy-mccloud/nhs-cost-claim-back-scheme
If you have any questions, please contact us.